Dow surged 493, advancers over decliners 7-1 & NAZ advanced 261. The MLP index jumped up 8 to 136 & the REIT index gained 7+ to the 341s. Junk bond funds climbed higher along with stocks & Treasuries rose in price. Oil shot up 4+ to a still very depressed the 16s (more below) & gold dropped 10 to 1711.
AMJ (Alerian MLP Index tracking fund)
The American economy shrank 4.8% in Q1, the sharpest decline since the last recesssion more than a decade ago as the coronavirus pandemic forced a near shutdown of the country, ending the longest expansion on record. The forecast called for GDP to show a 4% decline. GDP, the broadest measure of goods & services produced across the economy, fell at a seasonally adjusted annual rate of 4.8%, the Commerce Dept said in its first reading of the data. It was the first drop recorded since 2014 & the worst since 2009, when the economy contracted by 4.4% in the midst of the financial crisis. Still, the severity of the coronavirus-induced downturn will be reflected more accurately in the 2nd qtr, when the nation’s economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely, but economists agree it'll be grim, possibly surpassing the worst of the depression. The report likely solidifies the belief that the coronavirus has pushed the US into a recession. Officially, a recession does not occur until an economy experiences 2 consecutive qtrs of negative growth. In the past 5 weeks, the number of American workers filing first-time claims for jobless benefits surged to 26M, indicating the unemployment rate is close to 16%, significantly higher than it was during the worst of the last recession. Consumer spending -- which typically comprises about 2/3 of total GDP -- plunged 7.6% in the qtr as states mandated businesses deemed nonessential to close & directed residents to stay at home. Business investment tumbled 8.6%.
Oil prices spiked after data showed inventories swelled less than expected. West Texas Intermediate crude oil, the US benchmark, jumped 26% to $15.55 a barrel, receiving a boost from a trial indicating that Gilead Sciences' (GILD) drug remdesivir showed promise in treating COVID-19. Shelter-at-home orders during the pandemic have slashed fuel demand, dragging prices already hurt by a dispute between Saudi Arabia & Russia even lower. WTI rose sharply after the American Petroleum Institute said US stockpiles rose by 10M barrels last week, slightly less than the 10.6M barrels that was expected. Brent crude, the intl benchmark, was up 11% at $22.73. The API report showed crude oil stockpiles at Cushing, Oklahoma, a key US oil hub, increased by 2.5M barrels. Ahead of the API's report, Cushing inventories had swelled to 59.7M barrels, according to the Energy Information Administration (EIA). The storage facility tops out at about 76M barrels. The EIA's official report will be released shortly. An agreement reached earlier this month to cut production by 20M barrels per day is set to go into effect on Fri.
US home sales showed signs of collapsing in Mar, as the number of contract signs plunged sharply because of the coronavirus pandemic. The National Association of Realtors said that its pending home sales index, which measures signed buyer contracts, plummeted a seasonally adjusted 20.8% in Mar from the prior month to a reading of 88.2. That is the lowest level since 2011. Pending sales have fallen 16.3% from a year ago. The economic shutdown resulting from COVID-19 has hit real estate hard. Sales listings were already tumbling, but would-be buyers are now also coping with a rattled stock market & an uncertain job outlook as 26M people are out of work. Still, it is expected that sales to begin recover once the outbreak subsides.
The economic news is dreary, but hopes for the new coronavirus drug are bringing investors into the stock market. However home sales data is depressing & the GDP number showing a significant contraction in the US economy, while expected, was very sobering. Even though inventory data for oil showing the increase in oil inventories last week was encouraging, the actual number of 10M is still troubling. Although the Dow is up about a 3rd from its its recent lows, plenty of dark clouds remain, especially regarding the slow reopening of the US economy. The short term outlook for stocks remains worrisome.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 15.52 | +3.18 | +25% |
| GC=F | Gold | 1,713.70 | -8.50 | -0.5% |
The American economy shrank 4.8% in Q1, the sharpest decline since the last recesssion more than a decade ago as the coronavirus pandemic forced a near shutdown of the country, ending the longest expansion on record. The forecast called for GDP to show a 4% decline. GDP, the broadest measure of goods & services produced across the economy, fell at a seasonally adjusted annual rate of 4.8%, the Commerce Dept said in its first reading of the data. It was the first drop recorded since 2014 & the worst since 2009, when the economy contracted by 4.4% in the midst of the financial crisis. Still, the severity of the coronavirus-induced downturn will be reflected more accurately in the 2nd qtr, when the nation’s economy came to a near standstill to mitigate the spread of the virus. Estimates vary widely, but economists agree it'll be grim, possibly surpassing the worst of the depression. The report likely solidifies the belief that the coronavirus has pushed the US into a recession. Officially, a recession does not occur until an economy experiences 2 consecutive qtrs of negative growth. In the past 5 weeks, the number of American workers filing first-time claims for jobless benefits surged to 26M, indicating the unemployment rate is close to 16%, significantly higher than it was during the worst of the last recession. Consumer spending -- which typically comprises about 2/3 of total GDP -- plunged 7.6% in the qtr as states mandated businesses deemed nonessential to close & directed residents to stay at home. Business investment tumbled 8.6%.
How much the economy has shrunk so far this year as pandemic snaps expansion
Oil prices spiked after data showed inventories swelled less than expected. West Texas Intermediate crude oil, the US benchmark, jumped 26% to $15.55 a barrel, receiving a boost from a trial indicating that Gilead Sciences' (GILD) drug remdesivir showed promise in treating COVID-19. Shelter-at-home orders during the pandemic have slashed fuel demand, dragging prices already hurt by a dispute between Saudi Arabia & Russia even lower. WTI rose sharply after the American Petroleum Institute said US stockpiles rose by 10M barrels last week, slightly less than the 10.6M barrels that was expected. Brent crude, the intl benchmark, was up 11% at $22.73. The API report showed crude oil stockpiles at Cushing, Oklahoma, a key US oil hub, increased by 2.5M barrels. Ahead of the API's report, Cushing inventories had swelled to 59.7M barrels, according to the Energy Information Administration (EIA). The storage facility tops out at about 76M barrels. The EIA's official report will be released shortly. An agreement reached earlier this month to cut production by 20M barrels per day is set to go into effect on Fri.
Oil prices soar ahead of key inventory data
US home sales showed signs of collapsing in Mar, as the number of contract signs plunged sharply because of the coronavirus pandemic. The National Association of Realtors said that its pending home sales index, which measures signed buyer contracts, plummeted a seasonally adjusted 20.8% in Mar from the prior month to a reading of 88.2. That is the lowest level since 2011. Pending sales have fallen 16.3% from a year ago. The economic shutdown resulting from COVID-19 has hit real estate hard. Sales listings were already tumbling, but would-be buyers are now also coping with a rattled stock market & an uncertain job outlook as 26M people are out of work. Still, it is expected that sales to begin recover once the outbreak subsides.
Home sales plummet in March as pandemic forces Americans inside
The economic news is dreary, but hopes for the new coronavirus drug are bringing investors into the stock market. However home sales data is depressing & the GDP number showing a significant contraction in the US economy, while expected, was very sobering. Even though inventory data for oil showing the increase in oil inventories last week was encouraging, the actual number of 10M is still troubling. Although the Dow is up about a 3rd from its its recent lows, plenty of dark clouds remain, especially regarding the slow reopening of the US economy. The short term outlook for stocks remains worrisome.
Dow Jones Industrials
No comments:
Post a Comment